LONDON: A total of 134 countries representing 98% of the global economy are now exploring digital versions of their currencies, with over half in advanced development, pilot or launch stages, a closely-followed study shows.
The research by the US-based Atlantic Council think tank highlighted that all G20 countries with the exception of Argentina are now in one of those far-along phases although, notably, the United States is falling increasingly behind.
While still inching forward on a banks only “wholesale” digital dollar, one for the wider US population now looked “stalled” the report said, with Federal Reserve chief Jerome Powell saying this month, “nothing like that is remotely close to happening”.
US President Joe Biden ordered officials to look into a digital dollar in 2022 but it has become a divisive political issue with Biden’s Republican rival in this year’s US election race, Donald Trump, vowing not to allow it.
“The biggest headline here is that the divergence between the world’s largest central banks over CBDCs (Central Bank Digital Currency) is growing,” the Atlantic Council’s Josh Lipsky said pointing to how much further ahead China, Europe and Japan were.
Supporters say digital currencies will allow new functionality and provide an alternative to physical cash, which seems in terminal decline.
But they have also fuelled protests in a number of countries over the potential for government snooping.
The risk of the US lagging behind was “a more fractured international payments system” Lipsky added, saying Washington could also lose some of its global finance clout if other countries press on and set the new standards around CBDCs.
Some 36 pilot projects are now underway including China’s e-CNY which is being trialled with 260 million people across 25 cities, and in Europe where the European Central Bank (ECB) is six months into digital euro “preparation” work. — Reuters
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